Conformed Copy - C2529 - Second Rural Savings and Loan Cooperatives Rehabilitation Project - Amendment

Page 1 May 12, 1994 H.E. Paul Dossou Minister of Finance Cotonou Republic of Benin Re: Credit No. 2529 BEN Second Rural Savings and Loan Cooperatives Rehabilitation Project Amendment to the Development Credit Agreement Excellency: Please refer to the Development Credit Agreement between the Republic of Benin (the Borrower) and the International Development Association (the Association) dated September 3, 1993 (the Development Credit Agreement) for the above mentioned Project, and to your letter dated April 5, 1994 requesting certain changes in the mobilization of funds destined to the Project. We are pleased to inform you that the Association accedes.to this request and, consequently, proposes to hereby amend the Development Credit Agreement as follows: 1. Section 1.02 (i) is amended to read: "Special Account" means either of the accounts referred to in Section 2.02 (c) of this Agreement and "Special Accounts" means both such accounts collectively; and "SGSAs" means the Second Generation Special Accounts referred to in Section 2.02 (d) of this Agreement"; 2. Section 2.02 (c) is amended to read: "The Borrower shall, for the purposes of the Project, open and maintain in CFAF two special deposit accounts, an 'IDA Special Account' for the Credit and a 'Swiss Special Account' for the Swiss Contribution, each in the Banque Centrale des Etats des l'Afrique de l'Quest, on terms and conditions satisfactory to the Association. Deposits into, and withdrawals out of, the Special Accounts shall be made in accordance with the provisions of Schedule 4 to this Agreement"; 3. A new Subsection (d) is inserted after Section 2.02 (c) to read: "The Borrower shall, for the purposes of the Project, cause the Federation to open and maintain in CFAF two special deposit accounts (SGSAs), an 'IDA SGSA' for the Credit and a 'Swiss SGSA' for the Swiss Contribution, in a commercial bank or banks acceptable to the Association on terms and conditions satisfactory to the Association (including appropriate protection against set-off, seizure or attachment). Deposits into, and payments out of, the IDA SGSA and the Swiss SGSA shall be made in accordance with the provisions of Schedule 4 to this Agreement"; 4. Section 4.01 (b) (i) is amended by adding the words "and the Second Generation Special Accounts" after the words "Special Accounts" appearing therein; 5. In Schedule 3: 5.1 Part D. 1 (a) is amended by the deletion of the words "the Special Account" and the substitution thereof of the words "Second Generation Special Accounts", as well as by the deletion of the words "Special Account" and the substitution thereof of the words "Second Generation Special Accounts". 5.2 Part D 1 (b) is amended by deleting the words "Special Account" and substituting therefor the words "Second Generation Special Accounts". Page 2 6. Schedule 4 is amended to read in its entirety as set out in Attachment 1 to this letter. If you agree to such amendments, please indicate such agreement by signing and dating the enclosed duplicate original of this letter in the space provided below and returning it to us for our records. This amendment shall come into force and effect on the date upon which the Development Credit Agreement becomes effective. Sincerely, Olivier Lafourcade Director Occidental and Central Africa Department CONFIRMED: REPUBLIC OF BENIN Paul Dossou Date: June 9, 1994 SCHEDULE 4 Special Accounts and Second Generation Special Accounts 1. For the purposes of this Schedule: (a) the term "eligible Categories" means Categories 1 and 2 set forth in the table in paragraph 1 of Schedule 1 to this Agreement for the Special Account "IDA" and Category 3 for the Special Account "Swiss"; (b) the term "eligible expenditures" means expenditures in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit and the Swiss Contribution allocated from time to time to the eligible Categories in accordance with the provisions of Schedule 1 to this Agreement; and (c) the term "Authorized Allocation" means: (i) an amount equivalent to CFAF 100,000,000 to be withdrawn from the Credit Account and deposited into the IDA Special Account; and (ii) an amount equivalent to CFAF 50,000,000 to be withdrawn from the Swiss Contribution Account and deposited into the Swiss Special Account, all pursuant to paragraph 3 (a) of this Schedule. 2. The Borrower shall transfer any amount deposited into the Special Accounts from the Credit Account into the SGSAs within seven days of the deposit of such amount into the Special Accounts. No other payments shall be made out of the Special Accounts. Payments out of the SGSAs shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Association has received evidence satisfactory to it that the Special Accounts and the SGSAs have been duly opened, withdrawals of the Authorized Allocation and subsequent withdrawals to replenish the Special Accounts shall be made as follows: (a) For withdrawals of the Authorized Allocation, the Borrower shall furnish to the Association a request or requests prepared by the Federation for a deposit or deposits which do not exceed the aggregate amount of the Authorized Allocation. On the basis of such request or requests, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and the Swiss Contribution Page 3 Account and deposit into the appropriate Special Account such amount or amounts as the Borrower shall have requested. (b) (i) For replenishment of the Special Accounts, the Borrower shall furnish to the Association requests prepared by the Federation for deposits into the Special Accounts at such intervals as the Association shall specify. (ii) Prior to or at the time of each such request, the Borrower shall furnish to the Association the documents and other evidence required pursuant to paragraph 4 of this Schedule for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the Association shall, on behalf of the Borrower, withdraw from the Credit Account or the Swiss Contribution Account under the respective eligible Categories and deposit into the appropriate Special Account such amount as the Borrower shall have requested and as shall have been shown by said documents and other evidence to have been paid out of the SGSAs for eligible expenditures. All such deposits shall be withdrawn by the Association from the Credit Account or the Swiss Contribution Account under the respective eligible Categories, and in the respective equivalent amounts, as shall have been justified by said documents and other evidence. 4. For each payment made by the Federation out of the SGSAs, the Borrower shall, at such time as the Association shall reasonably request, furnish to the Association such documents and other evidence showing that such payment was made exclusively for eligible expenditures. 5. Notwithstanding the provisions of paragraph 3 of this Schedule, the Association shall not be required to make further deposits into the Special Accounts: (a) if, at any time, the Association shall have determined that all further withdrawals should be made by the Borrower directly from the Credit Account or the Swiss Contribution Account in accordance with the provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; or (b) once the total unwithdrawn amount of the Credit or the Swiss Contribution allocated to the eligible Categories, less the amount of any outstanding special commitment entered into by the Association pursuant to Section 5.02 of the General Conditions, shall equal the equivalent of twice the amount of the Authorized Allocation. Thereafter, withdrawal from the Credit Account or the Swiss Contribution Account of the remaining unwithdrawn amount of the Credit or of the Swiss Contribution allocated to the eligible Categories shall follow such procedures as the Association shall specify by notice to the Borrower. Such further withdrawals shall be made only after and to the extent that the Association shall have been satisfied that all such amounts remaining on deposit in the Special Accounts and the SGSAs as of the date of such notice will be utilized in making payments for eligible expenditures. 6. (a) If the Association shall have determined at any time that any payment out of the SGSAs; (i) was made for an expenditure or in an amount not eligible pursuant to paragraph 2 of this Schedule; or (ii) was not justified by the evidence furnished to the Association, the Borrower shall, promptly upon notice from the Association; (A) provide such additional evidence as the Association may request; or (B) deposit into the SGSAs (or, if the Association shall so request, refund to the Association) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. Unless the Association shall otherwise agree, no further deposit by the Association into the Special Accounts shall be made until the Borrower has provided such evidence or made such deposit or refund as the case may be. (b) If the Association shall have determined at any time that any amount outstanding in the Special Accounts or in the SGSAs will not be required to cover further payments for eligible expenditures, the Borrower shall, promptly upon notice from the Association, refund to the Association such outstanding amount. (c) The Borrower may, upon notice to the Association, refund to the Page 4 Association all or any portion of the funds on deposit in the Special Accounts or in the SGSAs. (d) Refunds to the Association made pursuant to paragraph 6 (a), (b) and (c) of this Schedule shall be credited to the Credit Account or the Swiss Contribution Account for subsequent withdrawal or for cancellation in accordance with the relevant provisions of this Agreement, including the General Conditions.